Women Allege Illegal Data Sharing in Suit Against Marketers
In the lawsuits, announced earlier this week by the firm James, Hoyer, Newcomer & Smiljanich, Tampa, FL, the women claimed to have received "mystery" charges after they made purchases from well-known direct marketing campaigns, including Abslide and Richard Simmons products from infomercials. The lawsuits claim the companies illegally shared personal information about their customers with business partners, which later issued the charges.
However, one of the companies being targeted, telemarketing firm MemberWorks, denied wrongdoing and said it had proof that the consumers not only ordered the services that led to the charges but also later received refunds.
The women make these claims in three separate lawsuits.
According to one of the lawsuits, Judith Jeselskis of Sebring, FL, ordered a Richard Simmons product, marketed by infomercial company GoodTimes Entertainment Inc. by telephone in January. Jeselskis said she declined upsells for other products and services but later discovered an $84 charge from MWI Essentials, a discount program offered by MemberWorks, on her debit card.
In another case, Marcia Walter, also of Florida, bought an Abslide exercise machine from Sylmark, a direct response marketing firm, for $49.90 in August 2000. She said she declined upsell offers but later found a $95.99 charge on her credit card from MWI ValueMax, another MemberWorks offering. Walter also claimed she was charged an additional $47.80 by Sylmark for an unordered box of pills, which she returned to the company unopened.
In the third lawsuit, Jeselskis also is suing Brylane, producers of the Lane Bryant catalog, and magazine marketing firm Synapse Group. Jeselskis said she bought from the catalog and later found charges of $55 and $12 for magazine subscriptions on her debit card.
The charges on Jeselskis' debit card resulted in her account being overdrawn, the law firm said. Because of that, she was without funds and unable to pay for basic expenses for two weeks.
"These companies reached into her bank accounts without her permission," Christa Collins, lead attorney representing Jeselskis, said in a statement. "She couldn't put food on the table."
However, MemberWorks, Stamford, CT, said it has tape recordings of Jeselskis and Walter agreeing to the charges they dispute. The two consumers were charged after their 30-day free trial periods ran out but later requested and got refunds credited to their accounts.
In both cases, the consumers received their refunds just a day after they requested cancellations in accordance with MemberWorks' no-questions-asked refund policy, the company said.
"We contend that these people were dealt with properly," said Sandy Nelson, vice president of public affairs at MemberWorks.
An attorney for Synapse Group, Stamford, CT, said his company had not yet been served with the lawsuit and declined comment. A spokeswoman for GoodTimes Entertainment, New York, also declined comment.
The remaining companies involved, including Brylane, New York, and Sylmark, Los Angeles, did not return phone calls seeking comment yesterday.
In April, MemberWorks and partner Sears, Roebuck & Co. entered into an agreement with the California attorney general and two district attorneys. MemberWorks paid $2 million in civil penalties and fees in response to concerns from the law enforcement officials that disclosures in MemberWorks' telemarketing pitches could confuse consumers.
MemberWorks has entered into other agreements with the attorneys general of Nebraska and New York in response to concerns about its marketing practices. The company also settled a 1999 lawsuit from Minnesota Attorney General Mike Hatch, who alleged that the company "used confidential information obtained from banks and other institutions to charge consumers for services and products that consumers did not believe they had ordered."